Monday, July 31, 2017

The Indian market rallied as much as 22 percent so far in 2017 in dollar terms but it is unlikely that we could see a similar performance in the second half of 2017, Marc Faber, editor of The Gloom, Boom & Doom Report said in an exclusive interview with CNBC-TV18.

“In a world where we have artificially low-interest rates, the market rallied a little bit ahead of itself and could witness slight correction. But, long term story still looks promising,” he said.

He further added that equity markets around the world in 2017 saw a strong performance of 17-22 percent in Asian markets including India as well as in Europe.

“Hence, the second half would be difficult and I would not be surprised to see US markets going down or the leadership changing. So far the leadership in US markets is held by bellwethers such as Apple, Netflix, Facebook, Amazon, Google etc. and that is about to change.”

This pattern will also apply to Indian markets where the leadership will change, but the only difference is that the leadership would shift from index to stock specific names.

“Going into the second half, India will be more of a stock pickers market and not an index market,” said Faber. There could be some volatility in the short term, but, for the long term, the story looks good.

In the short term, the Indian market could correct here but given favourable fundamentals in long term, Faber is not overly bearish. But, as I said – “If I have to invest for 10 years and choose between Indian and US, I would chose India because it can outperform the US,” said Faber.

Sunday, July 23, 2017

Marc Faber, investor and author of the Gloom, Boom & Doom Report, remains very bearish. He reckons we could be heading for “an epic decline in asset prices… after eight-plus years of bull markets”, which have left valuations at historically high levels. Another warning sign is that recent gains in most major indices, especially the Nasdaq in the US, have been “driven by a small number of stocks”.

The market’s dependence on the strong performance of a few stars is particularly worrying given that many well-known technology companies, including Amazon, Netflix and Apple, experienced hefty falls at the start of this month. Even if this was just a “correction”, there has clearly been a jump in volatility. One way or another, “when things finally start going down, they’ll go down a lot”, says Faber.

He is also worried about political risk. Over the past 30 years “an increasing share of wealth has gone to big corporations and wealthy individuals”. This will lead to demands for either “a big hike in taxes” or “policies that will lead to a big asset-price deflation”. The problem is compounded by the fact that both governments and companies are hiding their true debt levels by deliberately underfunding pensions obligations. In the case of companies, they are using the money to buy back shares instead.

Yet central banks are likely to try to delay the day of reckoning by printing even more money, meaning that there could even be an initial “lurch to the upside” with “QE99” pushing prices even higher. However, Faber is sure that “eventually the system will break”. As a result, he stands by his prediction that shares prices are set to fall by up to 40%.

Thursday, July 20, 2017

If the man often hailed as the original "Dr. Doom" is right, the stock market could see another "lurch" higher — at which point investors may want to cash out quickly and run for cover.

Marc Faber, the editor of "The Gloom, Boom & Doom Report' and a perennial bear, isn't backing down from his latest dire prediction that would send stocks plummeting by 40 percent or more.

A drop of that size could take the S&P 500 Index down from Friday's closing price of 2,438 to 1,463.

He used the meteoric rise of FANG stocks, which reflects Facebook, Apple, Netflix and Google (Alphabet), as a glaring bearish signal.

"We've had more than eight years of a bull market. The Nasdaq is being driven by very few stocks," said Faber on Friday's "Trading Nation." That rally "is not a particularly healthy sign from a technical point of view, and valuations are very high," the investor added.

Faber's comments come exactly two weeks after the Nasdaq set its latest intraday record high of 6,341.70.

"You know we have a lot of volatility, and when things will start to go down, they'll go down a lot," he said.

Faber is deeply concerned that wealth has flowed to big corporations and affluent people. He believes the imbalance could eventually disrupt the markets as we know it.

"Either people with money will be taxed heavily ... or we'll have a massive deflation in asset prices — I repeat: massive," he warned. "Eventually the system will break."

Faber is known for correction calls over the years which have never materialized. But he's sticking by his latest call, acknowledging critics have "questioned my sanity."

"We could print enough money that the Dow goes to 100,000. All I'm saying is it will end very badly, extremely badly," he said.

But it's not all gloom. Faber notes it could also give investors a rare "out-sized" buying opportunity similar to 2003 and 2009, when deep corrections gave traders a chance to load up on cheap assets.

Monday, July 17, 2017

Marc "Dr. Doom" Faber has a warning for investors — brace yourselves for another financial crisis.

Just last week, Federal Reserve Chair Janet Yellen said another crisis like the one in 2008 was not likely to happen "in our lifetime."

Faber told CNBC's "Squawk on the Street" on Monday that "I'm 71 and for sure in my lifetime, unless I have an accident tomorrow, I will see another financial crisis and a massive one."

He's particularly concerned about the high levels of debt around the globe.

"We have a colossal credit bubble in the world. Can it expand? Yes, but it cannot expand forever. One day there will be a limit and one day there will be another huge crisis because the debt level today is higher than it was in 2007," the editor The Gloom, Boom & Doom Report said.

The noted bear also has been calling for a big drop in the U.S. stock market and believes "we have a bubble in everything."

That said, he told CNBC, "I'm less bearish than I used to be. That worries me."

Because no one knows what the world will look like five years from now, staying diversified is key, Faber said. That means some money in real estate, stocks, bonds and precious metals.

"Although I'm pessimistic about the world and especially about political and social developments in the western world, I can still sleep well at night because I have the 25 percent exposure to equities."